Monday, December 30, 2013

In the early years
(1990-93) when we were laying the framework for the global firm that Deloitte,
Touche, Tohmatsu would later become I recall seeing the eye-popping travel
expenses we were incurring as well as the reaction of senior management. Were
these costs really necessary? Couldn't we invest a fraction of these expenses
into audio-visual technology that would enable us to meet with our colleagues
around the world real-time without ever leaving our offices?

Apart from the expense of travel, those who spend a good deal of time on the
road know there is also considerable hassle and inconvenience associated with
building your frequent flyer miles—so why not rely on video teleconferencing
instead and leave the jet lag and travel delays to others? The idea found
traction and Deloitte did invest considerable sums of money in teleconferencing
technology and we did get great use out of it—but we also discovered its
limitations.

Management groups that relied primarily on video teleconferencing to coordinate
their activities found that over time certain hard-to-define frustrations often
built up and that they needed periodic face-to-face meetings to clear things
up. Within minutes of meeting face-to-face, misunderstandings and tensions
disappeared like a morning fog with the sun. We came to conclude that as the
social animals that human beings are, communication is not limited to the
written or spoken word. We need face time as well.

We came to appreciate the difference between “high context” and “low context”
cultures. The US, Canada and North-Western Europe are mostly low context
cultures—that is, we don’t need to know people very well to feel comfortable
doing business with them. We can and do sign contracts with people we have
literally just met. But most of the rest of the world doesn't work this way.
They are high context cultures who would never undertake any serious engagement
with anyone without first developing a solid understanding of the person. They
rely less on lawyers and contracts and more on personal trust based on family
ties and friendships—which in turn are based on frequent, face-to-face contact.
So we came to understand that if we wanted to work effectively in these
cultures, we needed purposefully to get out of our offices and meet our clients
and business associates face-to-face on their home turf.

Technology is critical, but it does have its limitations—as every family who
has had a teenager texting at the dinner table knows…..

Monday, December 16, 2013

Regulating
private sector influence over the democratic policymaking process is a
constantly shifting landscape in the US as policymakers and public interest
advocates seek to maintain the integrity of the process and limit the
influence of money while not infringing on the Constitutional rights of
citizens to make their views known to policymakers. Rules
are constantly being made and revised as gaps or unintended consequences
become exposed (usually by the news media)—so even veteran lobbyists need to
periodically re-read these regulations in order to be in compliance.
Penalties can be severe with financial fines and even prison time as
punishment for those who make mistakes or who purposely ignore the law.

Most organizations and their employees that depend directly or indirectly on
the government are not allowed to lobby or make political contributions at all.
Employers have strict restrictions on soliciting their employees to
make political contributions. And until a controversial Supreme Court
ruling last year, there were absolute limits to the amount of
financial contributions wealthy individuals and businesses could give
political candidates.Mark Twain once noted that “mankind is the only one of the animal kingdom that
blushes—or needs to.” To that point, the
best constraint on undue political influence on the democratic process is
simple transparency—a requirement for lobbyists to list themselves publically
according to whom they represent, what their purpose is, and how much they
are getting paid to do that work. This is how the European Union got
started in regulating their lobbyists and is how the United Kingdom regulates
itself. In fact with this level of transparency in the UK, they even
allow Members of Parliament to be paid lobbyists as long as their payments are
publically disclosed.Here are the links below to the four entities in
the US Government that share responsibility for monitoring and regulating
lobbying in this country. FARA is run by the Department of
Justice to monitor foreign money being spent in the US to influence public
policy. This was a program started just before the Second World War and
is still in force today.http://www.fara.gov/http://lobbyingdisclosure.house.gov/http://www.senate.gov/http://www.fec.gov/disclosure.shtml
These are not perfect regulations but they have made the policymaking process
in the US more transparent and somewhat more honest than it used to be. I
recall hearing stories of dinner parties hosted by lobbyists a generation
ago where Members of Congress could expect to find hundred dollar bills under
their dinner plates. That sort of activity does not happen anymore.
While money still plays a huge role in politics, at least the common
citizen is more aware now of who is being paid what, by whom, and for what
purpose—and that does make a difference in determining how people vote and
perhaps why.

The biggest conflict of interest remaining for Congress that has not been
addressed to-date is their ability to buy stock in companies that are affected
by their legislation. In the private sector this would be considered
“insider trading” and is illegal, but not so for the US Congress.

Monday, December 9, 2013

More often than
not, membership organizations find their stakeholder communications to be a
source of frustration for all concerned. Stakeholders complain they are not
“getting the messages” sent to them even while those poor souls responsible for
communications can document that they are sending out clear messages at machine
gun frequency. So what is going on?

It is an old lesson—saying something is not the same as being heard.
Communications occurs best when there is an innate understanding between the sender
and the receiver. Among other things, the sender knows whom the message is
intended to reach, why it should be of interest to them, as well as how and
when best to reach them. And therein lies the catch—just because you feel the
urge to say something, doesn't mean the person or people you want to speak to
is going to hear you—or if they do, that your message will have the desired
effect.

Carpenters have a saying that communicators would do well to heed: measure
twice, cut once. Too often communicators feel that frequency and volume can
compensate for ill- conceived messages that do not seem to be having their
intended impact.

Content of course is important. Are those you are trying to communicate with
interested in the subject matter? Ever notice how in a noisy room of people you
suddenly notice when someone has mentioned your name on the other side of the
room?—or that in a noisy theater someone suddenly gasping the word “Fire!” is
heard by all? Personal interest tends to filter out the noise and to focus
sharply on matters related to self-survival or simple vanity.

But the means and timing of communicating are also important. Using the
telephone works, but not at dinner time or at 1:00 am if you ever want that
person to take your call again! The print media—newspapers and magazines—used
to be a good general way to reach large numbers of people, but people under the
age of 30 tend not to rely on the print media for their information as much as
previous generations. If you want to reach members of that generation the
social media might be the better approach to take.

So yes, you probably can prove your audience has received the newsletters or
emails you are sending them, but you may be deceiving yourself if you think
they are getting your message. Spending the time and resources first to
understand what your audiences want as well as when and how they want to hear
from you will save you in time, effort, expense and frustration later!

In non-profit organizations silos
tend to result from “vertically” structured business functions where each major
business function—membership, education, publications, meetings, etc.—is a separate,
stand-alone, fully self-contained business operation. Silos are often the way small and
start-up organizations organize early in their organizational life—by
individual function. Silos can be an
efficient way for the conduct of limited, similar business operations.

As organizations grow, however, silos may grow to
reflect an inward focus by an organization--to prioritize and do the things
that those in the silo “like to do”. The
longer an organization functions with silos, the greater the importance of the
individual silo becomes to those working within it. Soon, the importance of the silo may outweigh
the importance of the overall organization, at least to those dwelling in the
silo.

When this perception of the importance of an
individual silo takes hold, it frequently doesn’t matter (to those in the silo)
if there is a market for their products, or if operations are profitable. Further, it’s not uncommon for there to be
strong competition among silos for organizational resources—financial and
human. The result? The more silos that an organization has, the
more that internal competition may inhibit organizational responsiveness, performance
and viability. Am I right on this?

Is there an alternative for improved
organizational performance? Here it is
folks: market focus! That’s it:
market focus.

Market focus means identifying the markets critical to
organizational success as the basis for the development and sales of all of an
organization’s goods and services. This
involves “the voice of the customer”:
learning and understanding the customer’s expectations and requirements,
delighting customers and building loyalty.
This is a far cry from “producing what we like to produce” and trying to
get someone to buy it.

This perspective of market focus can be a cultural and
functional shift for non-profits where volunteers and staff in silos “do what
they like to do”. Market focus is an
“external view”, as opposed to silo’s “internal view”. Implementing market focus, using the voice of
the customer, involves an annual process to assess and guide an organization’s
portfolio of goods and services. This
means encouraging and supporting innovation for new programs; it means
sunsetting some existing programs, in a planned, orderly basis.

Market focus means new opportunities. New opportunities mean new revenues and
resources, which will benefit all organizational members and customers. Want to trade your silos for new
opportunities? Become market focused!

Monday, November 25, 2013

What’s the best method for CEO annual performance planning
and evaluation? I suppose the answer is,
“it depends!” This is because every
non-profit organization has its own unique culture, strategic and operating
situation and personalities, which evolve and change over time. Thus, there is really no “one size fits all”
methodology. That said, there are
several major approaches for CEO annual performance planning and evaluation
that may help to put in place what will best fit and work best for every
organization and CEO.

Purpose

There is (or should be) a common purpose for performance
planning and evaluation: help the
organization to improve each year by helping the CEO to improve annually. It’s important to recognize the connection
between successful organizational performance and successful CEO
performance. One doesn’t often happen
without the other! It’s usually the
CEO, who leads the staff, and is responsible for the organization’s annual
program planning, budgeting and execution.
It’s often the CEO who helps identify the strategic directions and
priorities of the organization. Thus,
the CEO is a very valuable person for the organization’s success. Volunteer leaders should understand the
direct connection between organizational performance and CEO performance and,
thus, be committed to helping support and improve CEO performance each year in
a constructive and positive manner.

Methodologies

Each non-profit organization has its own special culture,
it’s “life-style” and value system.
Annual CEO performance planning and evaluation should fit the
organization’s culture. The following
table illustrates a range of association cultures or “life-styles” and the
characteristics of CEO planning and evaluation systems which fit each culture.

It’s worth pointing out that the “ambiguous” category is in
recognition of the situation where some associations attempt to use either a
“generic” style of performance planning and evaluation that may have been
handed down over time from within the organization, borrowed from another organization
and/or attempts to fashion a planning and evaluation process which will
represent a broad range of priorities and ideas, i.e., a smorgasbord!

Annual objectives may either be undefined, or a “smorgasbord that
attempts to combine objectives from various association cultures and personal
priorities across an organization

Metrics may often be based on generic template; taken from some other
organization; may reflect “one size fits all” perspective

Eventually unsatisfactory; frequently leads to a frustrating
experience; typically results from lack of focus or lack of conscious
attention

The table illustrates a wide range of association cultures
or “life-styles” and attempts to show how different they may be when it comes
to CEO performance planning and evaluation.
While many organizations may have elements of some (or all) of these
cultures, when it comes to CEO performance planning and evaluation it really is
important for the volunteer leaders and the CEO to reach common agreement on
what is truly most important—what matters most when it comes to organizational
performance. Remember, the purpose of
planning and evaluation: helping the
organization improve through helping the CEO to improve!

Monday, November 18, 2013

Annual performance planning and related annual performance
review of association CEOs is often a mysterious “black box” process for which
little is known and even less is written.
As a result, the planning process and the review process may be very
different in every organization. In
fact, these two processes may often be very different year to year, in the same
organization, unless some education and discipline is applied to make planning
and review positive and helpful year in, year out, regardless of changing
personalities. Here’s five critical
elements which may help performance planning and review to be the constructive
learning experience they should be.

Purpose of CEO
Planning & Review: There are a
variety of reasons for CEO planning and review, which should be reflected in
the annual process, including 1) achieving a clear strategic plan and
supportive annual operational plan; 2) strengthening the CEO as one means of
achieving organizationsl progress; 3) making the processes a professional and constructive
process for all involved; 4) matching the organization’s culture and
characteristics (there’s no “one size fits all” process for CEO planning and
review)

Formalize and
Document the Full Annual Process: This
element should address 1) a written policy that formalizes the purpose,
process, schedule for common understanding and consistent annual commitment of
all parties for a successful process; 2) written annual performance objectives
and metrics prepared by the CEO and approved formally by the governing board;
3) written documentation of the results of each annual process with copies to
the CEO

Recognize and Foster
a Clear, Open Process: In most
non-profits, the only employee of the board is the CEO. Everyone else is an employee of the CEO. Therefore, a
clear, open process is needed to support and aid the CEO in achieving
the mission of the organization. This
should include: 1) the CEO being a full
participant in the planning, execution and assessment of the performance
planning and evaluation process; 2) direct CEO communication opportunities with
the board at every board meeting, keeping communications channels open and
working.

Provide for Lessons
Learned and Annual Improvement: Performance
planning and evaluation are like every other association function: subject to lessons learned and the need for
continual improvement. Thus the process
should: 1) work to build trust, honesty
and mutual respect—teamwork should be stressed; 2) incorporate lessons learned
and improvement into the process annually as mutually agreed.

Compensation
Principles: CEO compensation varies
by type, size and location of the non-profit organization, as well as by the
level of knowledge, experience and duties of the CEO. Annual compensation should consider: 1) reliable association-based compensation
studies for similar organizations and CEO roles; 2) both fixed and variable
compensation, with the variable compensation, in most cases, being
discretionary bonus programs, rather than the higher paying incentive programs
common in industry; 3) CEO and staff annual compensation are not comparable to
the compensation levels of association volunteers in their personal line of
work—CEO and staff compensation are only comparable to their peers in similar
non-profit organizations.

A couple of closing
thoughts: A non-profit CEO is not a
“manager”! The CEO is really a leader,
thus the executive performance and evaluation should reflect the
characteristics of leaders, i.e., vision and initiative, accountabilities,
delegation/monitoring, outcomes, communications and relationships.

A subsequent article will explore various methodologies for
CEO planning and evaluation.

Monday, November 11, 2013

Want to be
a CEO? Already a CEO, but switching
jobs? Here are fivecomponents
of your employment agreement that are important to consider and that no one
else may tell you:

Duties: Are the roles, duties, title and
authority of the CEO clearly stated?
Is it clear the CEO is singularly responsible for staff, budgets,
contracts, and other essential annual business operations? Can these be changed, and if so, by whom
and how? Are changes (change of
duties, change of role, title or authority, reorganization, merger,
acquisition, cessation of operations, etc) considered as termination for
good reason (see termination below)?

Compensation,
benefits & annual review: What is the base compensation? What are the types of variable
compensation, e.g., bonus, commission, deferred compensation, etc.? Are other types of compensation
appropriate, e.g., one-time (moving, relocation, etc.) and/or recurring
(car, travel, business club, etc)? Will
compensation be established and maintained as “market rate” and how will market
rate be determined annually? Does
the association’s standard benefits package apply to the CEO? Who participates in these annual
recurring decisions? How is
annual performance planning and evaluation conducted? Who leads the annual review
process? Who participates in the
process? Is the CEO annually at the
mercy of only a single volunteer or a balanced group of senior volunteer
leaders?

Term
& renewal: Is there a reasonable initial term of
employment? When and how will the
initial term be extended or renewed? Is there annual compensation if
employment is terminated before the initial term of employment has
expired? Who participates in these
decisions? What if there is no
formal action to renew the term of employment—does it renew automatically,
or is it considered involuntary termination?

Termination: How will unfavorable “termination for
cause” be defined? How will other
types of favorable termination (voluntary, involuntary and for good reason)
be identified and defined? How are the
termination definitions linked to annual compensation, benefits and any special
termination pay-outs, e.g., termination in first year of employment, termination
prior to expiration of initial term or subsequent term of employment, involuntary
termination, for good reason, etc.

Restrictions: Are there personal or professional
restrictions on the CEO while employed, and/or upon termination? For example, can the CEO teach, write,
do research or other similar activities, while employed? Upon termination, can the CEO immediately
work for another association in the same geographical area? Can the CEO immediately approach
employees of her/his former organization about career changes?

Thinking
about these key parts of your CEO employment agreement, and
reaching mutually agreeable resolution with your volunteer leaders will help to
establish your credibility as a senior executive. It will alsomake
your life a lot more enjoyable, so consider these points before hiring and
contract negotiations. Good luck!

Monday, November 4, 2013

Is there really anything new
under the sun? Most non-profit
organizations consist of a diverse and geographically dispersed of volunteers
and staff, united in some common organizational purpose. The Greek philosopher Aristotle wrote about
the “Virtues” as a guide to living a “happy life”. The more diverse a non-profit organization
may be, the more important it is to have a “happy life”!

Author Deb Mills-Scofield,
writes, “Look at your organization, your teams. You see people with a mix of traits;
some are very courageous, others conservative; some live and breathe customer
delight, others obsess with operational excellence. These are examples of the
classic virtues — the Greek four of courage, justice, prudence and temperance,
and the Christian three of faith, hope and love (or charity)”.

For successful organizational leadership and a
“happy life” for an organization, here’s a brief summary of what Aristotle felt
was important:

·Faith: Faith
equals trust, which is based on our experience, on promises kept. It is
increased with authenticity and honesty. It assumes worth (value) and
worthiness (valuable) is aligned. Is Google’s market cap based on its
computer servers and communication networks or on its algorithms, people,
corporate culture and the belief, based on past experience, they will continue
to produce worth, value.

·Justice: Justice
is the difference between fair and equal. Justice also applies the triple
bottom line to innovate solutions that are meaningful and effective and
preserve the environment — think of Patagonia, Toms of Maine, and Whole Foods.
This directly affects your brand’s reputation.

·Love: Aristotle
defined love in 3 ways: Eros (passion), Philos (friendship) and Agape
(sacrifice, servant leadership). Think of “Voice of the Customer,” “Voice of
the Employee,” and “Voice of the Community.” Passion is exhibited through
excellent customer service (e.g., Zappos), social capital and servant
leadership. Love is all about creating and sustaining authentic customer
value.

·Prudence: Prudence
is about empowering people so the organization is agile and adaptable. This
affects who and how you hire, train, develop and free your talent. It means you
balance short, medium and long terms. It’s about assessing outcomes and outputs
and can require courage. Prudence means your people know, and can impact, the
processes and rules of the road and knowing “when to hold ‘em and when to fold
‘em.”

·Temperance: Temperance
is Greek for “the middle way,” moderation, balancing competing interests. It
applies to work-life fit, stakeholders, team’s diversity, policies for
consistency but not constraint, long versus short term and accountability
versus authority.

Your organization and teams may
not have all of these virtues on an everyday basis, but hopefully it has (and
uses) the virtues most critical for success of your various projects and
activities. If not, consider reviewing
Aristotle’s ideas about the “Virtues”.

For the complete article, go to http://smartblogs.com/leadership/2013/08/01/21st-century-leadership-learnings-from-2500-years-ago/

Monday, October 28, 2013

“Money, money, money, money, money….” (from
“Cabaret,” the musical). Many, if not most, of us consciously chose
careers in the nonprofit and public service sectors

Many, if not most,
of us consciously chose careers in the nonprofit and public service sectors
because of their mission-driven focus to better the world, or at least that
part of it that we are in. And in this context, the subject of money is often
seen as antithetical to value-based organizations and causes many good
nonprofit and public service executives visibly to cringe whenever the word is
mentioned.

This is unfortunate—especially as for-profit companies, which are definitely
driven by money, are increasingly eating nonprofit organizations’ lunches in
markets such as education and professional credentialing that used to be the
exclusive reserve of nonprofit organizations.

Money may be the “root of all evil” for religions, but it is a good and useful
tool for managers who are interested in measuring the efficiencies and
effectiveness of their programs and operations as well as the relevancy of any
and all products and services that might otherwise be bundled and given away
for free as “member benefits.”

This concept of money as a metric is a large part of what has driven nonprofits
to become less dues and more non-dues focused over the past decade and is a
major contributing cause to the nonprofit awakening that we are seeing (cf. A
new study by Johns Hopkins University highlights new data from the Bureau of
Labor Statistics that reveals surprising trends from nonprofit sector job
growth. “Holding the Fort: Nonprofit Employment During a Decade of Turmoil”
reports from 2000 to 2010 the nonprofit sector had an annual average job growth
of 2.1 percent. Over the same period the for-profit sector had an average
annual rate of minus 0.6 per).

So if you are a manager of a nonprofit and pride yourself on not giving a
thought to money—you may want to reconsider—it may not be your personal
motivator, but it is definitely your friend as a management tool.

Monday, October 21, 2013

Through a
historic collaboration, The Better Business Bureau, GuideStar and Charity
Navigator have distributed a "letter to donors," aimed at clarifying
the "overhead myth" often used to assess performance of nonprofits
when making donations. Here’s the
verbatim letter:

To the Donors of America:

We write to correct a misconception
about what matters when deciding which charity to support. The percent of charity expenses that go to
administrative and fundraising costs—commonly referred to as “overhead”—is a poor measure of a
charity’s performance.

We ask you to pay attention to
other factors of nonprofit performance: transparency, governance, leadership,
and results. For years, each of our organizations has been working to increase
the depth and breadth of the information we provide to donors in these areas so
as to provide a much fuller picture of a
charity’s performance.

That is not to say that overhead
has no role in ensuring charity accountability. At the extremes the overhead
ratio can offer insight: it can be a valid data point for rooting out fraud and
poor financial management. In most
cases, however, focusing on overhead without considering other critical
dimensions of a charity’s financial and organizational performance does more
damage than good.

In fact, many charities should
spend more on overhead. Overhead costs include important investments charities
make to improve their work: investments in training, planning, evaluation, and
internal systems—as well as their efforts to raise money so they can operate
their programs. These expenses allow a charity to sustain itself (the way a
family has to pay the electric bill) or to improve itself (the way a family
might invest in college tuition).

When we focus solely or
predominantly on overhead, we can create what the Stanford Social Innovation
Review has called “The Nonprofit Starvation Cycle.” We starve charities of the
freedom they need to best serve the people and communities they are trying to
serve.

If you don’t believe us—America’s
three leading sources of information about charities, each used by millions of
donors every year—see the back of this letter for research from other experts
including Indiana University, the Urban Institute, the Bridgespan Group, and
others that proves the point.

So when you are making your
charitable giving decisions, please consider the whole picture. The people and
communities served by charities don’t need low overhead, they need high
performance.

Signed by the Presidents/CEOs of the BBB, GuideStar and Charity Navigator, these thoughts should help
all of us to better recognize the proper role of overhead and what is truly important
in our volunteer contributions and organizations.

Tuesday, October 15, 2013

Have you noticed that the economy hasn’t been transformed into a
positive, high-energy environment? While
we may not be in the depths of 2009, there is little to encourage
optimism. Non-profit organizations,
dependent on dues revenues and non-dues income, continue to be under
pressure. The pressure may be from
diverse sources:

Reduction in membership and membership dues

Shrinking base of non-dues income sources

Less available time for volunteer service to the
non-profit

Pressure to cut staff and other operating
expenses

Many associations, facing these pressures, continue to do what they have
always done, drawing on reserve funds to offset the negative economy. Other associations have seen the slow economy
as a leadership opportunity; an opportunity to review and adjust their
operations and value-added approach to business.

Opportunity for
the Visionary

The challenging impacts of the prolonged economic slowdown actually offer
an opportunity for the visionary. This
may be the very best time to re-assess legacy programs, products and services,
identifying and prioritizing which ones most effectively support the
organizational mission and provide essential capital for operations and
reinvestments.

Virtually all non-profit organizations have a host of long-term, legacy
programs, products and services that hang on from year to year. Experienced association staff know that major
organizational change almost never takes place when times are good and
members/money is rolling in. For change
to take place, it’s often the case that the pain of doing nothing has to
outweigh the pain of change!. Thus, when
membership and revenues are decreasing, often becomes the ideal time to focus
everyone’s attention and energy on important changes needed to meet a changed
economy.

Change Leadership

Why do many organizations continue to do what they have always done, even
during challenging economic times and even enduring negative annual financial
performance? Why is change leadership so
difficult? Harvard Business School
professor John Kotter writes that the essential first step in organizatonal
change is “to establish a sense of urgency” which is shared throughout the
organization! Even during emergencies,
there is a normal human desire to hang onto the familiar and predictable. Unfortunately, little in our changing world
remains familiar and predictable for long.

Thus, our continued economic challenges are an opportunity for change
leadership, where it may be most needed and beneficial. Experienced and visionary volunteer and staff
leaders will work together to critically review their organization’s
performance, communicate a sense of
urgency about needed changes and put in motion the new vision and
implementation steps which may be needed.

This “challenging” economy offers important opportunities for new
organizational directions. Let’s get
cracking!

Monday, October 7, 2013

Every organization, whether
for-profit or non-profit, strives to achieve an effective governing board. McKinsey & Company, a recognized leader
in organizational management in the
for-profit corporate sector, often provides research useful for profit oriented
and non-profit organizations alike. In a
recent 2012 survey, “Improving Board
Governance: McKinsey Global Survey
Results”, McKinsey has some interesting findings which may be useful
benchmarks for non-profit CEOs and volunteer leaders.

Survey contributors Chinta
Bhagat, Martin Hirt and Conor Kehoe write, “Board directors today are more confident in their knowledge of the
companies they serve and more strategic in their approach than they were in
2011. We asked respondents to
focus on the single board with which they are most familiar. Overall, 166
respondents represent publicly owned businesses, and 606 represent privately
owned firms; they represent the full range of regions, industries, and company
sizes.

Focusing on Strategy

“Over 90
percent of respondents also say their boards have become more effective over
the past five years, most often attributing that improvement to better
collaboration with senior executives and more active or skilled independent
directors”, according to the survey.

Two reasons
may explain why boards are most effective at strategy: board members say they
spend more time on it than other areas and that they have increased the amount
of overall working time they devote to strategy, answering the call to action
expressed by respondents to previous surveys. “In our 2008 survey, respondents
reported that 24 percent of board time was spent on strategy—and a clear
majority said they would increase the time spent.” Now, directors say their boards
spend 28 percent of their time on strategy, and only 52 percent say they would
increase it (compared with 70 percent of respondents who said so in 2011).
Meanwhile, the share of time spent on execution, investments, and M&A has
shrunk, which is likely related to the fact that overall M&A activity has
declined since 2007.

Room for Improvement

While
respondents say their boards are taking more responsibility for strategy, risk
management is still a weak spot—perhaps because boards (and companies) are
increasingly complacent about risks, as we move further out from the 2008
financial crisis. This is the one issue where the share of directors reporting
sufficient knowledge has not increased: 29 percent now say their boards have
limited or no understanding of the risks their companies face. What’s more,
they say their boards spend just 12 percent of their time on risk management,
an even smaller share of time than two years ago.

Despite the
progress they report, directors identify the same factors that would most
likely improve board performance as respondents did in the previous survey: a
better mix of skills or backgrounds, more time spent on company matters, and
better people dynamics to enable constructive discussions. With respect to
time, directors say they devote roughly the same number of days to board work
as in 2011, and they still want more time. Across regions, directors at North
American companies work an average of 22 days on company matters—notably less
time than the 29 days and 34 days, respectively, reported by directors at
European and Asian companies.

Looking ahead

Increase
attention to risks.
According to respondents, most boards need to devote more attention to
risk than they currently do. One way to get started is by embedding
structured risk discussions into management processes throughout the
organization.

Make
time. As in 2011, most
directors say they want to spend more time on board work, and the results
suggest real benefits from doing so: directors at higher-impact boards
spend many more days per year on their work than everyone else, which
likely helps them stay more relevant to and engaged with important company
matters.

Learn
from peers.
Directors at boards with less impact have much to learn from the actions
taken by higher-impact boards, and not only when it comes to strategy.
Using robust financial metrics, conducting postmortems of major projects,
and using systematic processes to create competitive advantage through
M&A—which the high-impact boards do more often—could all help boards
become better.

How would you compare your non-profit
governing board to these results? Do you
periodically survey your board for bench-marking and opportunities for
governance improvement? For a full copy
of the survey findings, go to http://www.mckinsey.com/Insights/Strategy/Improving_board_governance_McKinsey_Global_Survey_results?cid=other-eml-alt-mip-mck-oth-1308

Monday, September 30, 2013

Each organization tends to
have that governance structure that reflects its values and culture. If having
every voice at the table for every definable stakeholder group is what is most
important to an organization then such groups tend to emphasize those traits
while also accepting that the trade-off is to have process-intense
decision-making governance structures that resist change. This perhaps marks
one extreme of a spectrum.

The other extreme is represented by mission-driven organizations where the driving
force lies in finding the means and strategies to advance the organization's
mission. The people chosen to serve the governance structures of such
organizations are chosen for this purpose alone. This is much more common to
the governance structures of for-profit corporations than is it in the
nonprofit world. The governance structures of these organizations tend to be
lean, focused and fast-moving. The dangers in such structures are an increased
risk of insider dealing and myopic decision making.

Somewhere in between lies the ideal governance-operational balance, but that
spot is different for each organizational culture, I think. As a consultant I
prefer the second model to the first because decision making is clearer and
easier and these organizations do tend to adapt more easily to a fast-changing
environment. But like the tortoise and the hare sometimes these lumbering,
muscle-bound organizations in the first model tend to muddle through and end up
winning the race after all!

Monday, September 23, 2013

How many of us have habits we’d
like to change? Hold up your hands! I’ve got my hand raised; how about you? According to a recent article by Daniel
Goldman, the brain’s basal ganglia plays a key role in the formations of
habits, both good and bad. What’s the
basal ganglia I heard someone say? The basal ganglia (or basal
nuclei) are a group of nuclei of varied origin in the brains of
vertebrates that act as a cohesive functional unit. They are situated at the
base of the forebrain and are strongly connected with the cerebral cortex, thalamus and other brain areas. If you don’t
believe me, just Wiki it! But I digress.

According to Mr. Goldman, “As we keep repeating a routine of any kind, the
brain shifts its control of the habit from areas at the top of the brain to the
basal ganglia at the bottom. As this switch occurs, we lose awareness of the
habit and its triggers. The routine springs into action in response to a
trigger we don’t notice, and does so automatically. We lose control.”

Mr. Goldman writes, “This (idea of habits) came up at a workshop I gave
with Tara Bennett-Goleman on her new book, Mind Whispering: A New Map to
Freedom from Self-defeating Emotional Habits, which
explains the neuroscience of habit change. She recommends mindfulness as a way
to bring unconscious habits back into awareness where they can be changed. And
she outlines a simple five-step process for making that change, especially
helpful if the person is working with a
coach.

1. Familiarize
yourself with the self-defeating habit. Get so you can recognize the routine as
it starts, or begins to take over. This might be by noticing its typical
thoughts or feelings, or how you start to act. You can also follow Paul Ekman's
simple suggestion: keep a journal
of your triggers.

3. Remember the
alternatives – think of a better way to handle the situation.

4. Choose
something better – e.g., what you say or do that would be helpful instead of
self-defeating.

5. Do this at
every naturally occurring opportunity.

Tara cites the neuroscience evidence that the more often you can repeat the
new routine instead of the self-destructive one, the sooner it will replace the self-defeating habit in your basal ganglia.
The better response will become your new default reaction.

To read the full article, go to http://www.linkedin.com/today/post/article/20130616203532-117825785-five-key-steps-to-habit-change

Monday, September 16, 2013

Experienced non-profit CEOs and senior
staff know that their job tenure may be rocky.
Tension, sometimes conflict, with volunteers and staff may be all too
common. When these situations occur they
are not good for the organization or those involved. What can be done to understand and minimize
these situations?

Closer examination often reveals that active volunteers
care passionately about the association. Why else would they volunteer their time? Many volunteers are leading figures in their
field. While many volunteers are
subject-matter experts, many have little leadership experience in the unique
setting of nonprofit, volunteer-led organizations. In fact, many active volunteers may have
little senior or executive leadership experience, since their work roles may be
at mid-management or specialist levels.

By comparison, many CEOs and senior staff spend years
expanding their enterprise-wide leadership and management knowledge of
nonprofits. Many CEOs and senior staff gain perspective through active
participation in the broader nonprofit world.

Thus we have a disparity:
volunteers without senior or executive management experience working
directly with staff who may be functioning in senior or executive roles on a
daily basis. Compounding this disparity
of knowledge and experience is the fact that roles and responsibilities of
volunteer leaders and CEOs often are highly ambiguous. Even where there are
written policies, there may be many more unwritten policies actually
determining who does what, when, and how. Sound familiar?

What can be done to reconcile these disparities between
volunteers and CEOs/senior staff? One
important improvement is forging and maintaining a volunteer-staff partnership
built around leadership role clarity based on the following:

·
Mission-driven
activities: These activities tend to represent the purpose of the
organization. These activitiesmotivate volunteers and are where most
want to be active. These activities, which are rightly led and populated by
volunteers, may produce few revenues and may be largely subsidized. This
financial situation may be coupled with volunteer assertions that association
activities shouldn’t produce revenues over expenses, to keep volunteer costs to
a minimum. Mission-driven activities are
critical. There is nothing wrong with subsidized activities, so long as revenues
from other sources are available for the needed subsidies.

·
Business
operations activities: These activities are where most of the positive
revenue is created to subsidize mission-driven activities. Because they are
profit-and-loss oriented, they must be staff led and managed, since volunteers
simply have neither the access nor the time to manage business affairs in the
timely and agile manner required. A caution: business activities must be
related to the mission, as much as subsidized activities.

·
Clear
roles: Establishing clear roles and
accountabilities for these two categories of association activity enables
volunteer leaders and CEOs to play to their respective strengths. Such clarity,
coupled with good communications, enables effective leadership, improved
relationships, and strengthened organizational performance.

Leadership
role clarity is an important step to transform tension between volunteer
leaders and CEOs into productive partnership. Annual and on-going volunteer and
staff leadership orientations provide on-going opportunities to discuss and
reinforce the importance of role clarity.

Tuesday, September 10, 2013

It is a forehead
slapping, frustrating moment when a manager realizes the metric they have been
using to measure a program’s effectiveness may not be the right one--but it is
the only explanation sometimes when hitting a target leaves you less than satisfied,
when you realize that you could hit the target repeatedly and still never be
any further ahead in the end. It is a more common managerial mistake than many
realize, but how do you solve it—how do you know you have set the target on
what truly matters?

The answer lies in the realization that every strategic goal has multiple
dimensions such as:

• Financial, are the revenues generated enough to cover costs and contribute to
investment in new intellectual capital?;

• In what measurable way(s) does it contribute to advancing the organization’s
mission and vision? and

• In what measurable ways does it increased the market share or impact of your
organization on your target markets?

But there is a fourth area that the most effective programs cover as well:

• How has this improved the economic performance of your customers?—how has it
helped students find jobs, professionals to find better paying positions, and
employers to operate more efficiently and profitably?

As important as the first three are, we have found that it is this fourth
aspect of measurement that matters most in this competitive global economy we
all live in.

Thursday, August 29, 2013

Every organization, whether
for-profit or non-profit, strives to achieve an effective governing board. McKinsey & Company, a recognized leader
in organizational management in the for-profit corporate sector, often provides
research useful for profit oriented and non-profit organizations alike. In a recent 2012 survey, “Improving Board Governance: McKinsey Global Survey Results”, McKinsey
has some interesting findings which may be useful benchmarks for non-profit
CEOs and volunteer leaders.

Survey contributors Chinta
Bhagat, Martin Hirt and Conor Kehoe write, “Board directors today are more confident in their knowledge of the
companies they serve and more strategic in their approach than they were in
2011. We asked respondents to
focus on the single board with which they are most familiar. Overall, 166
respondents represent publicly owned businesses, and 606 represent privately
owned firms; they represent the full range of regions, industries, and company
sizes.

Focusing on Strategy

“Over 90
percent of respondents also say their boards have become more effective over
the past five years, most often attributing that improvement to better
collaboration with senior executives and more active or skilled independent
directors”, according to the survey.

Two reasons
may explain why boards are most effective at strategy: board members say they
spend more time on it than other areas and that they have increased the amount
of overall working time they devote to strategy, answering the call to action
expressed by respondents to previous surveys. “In our 2008 survey, respondents
reported that 24 percent of board time was spent on strategy—and a clear
majority said they would increase the time spent.” Now, directors say their boards
spend 28 percent of their time on strategy, and only 52 percent say they would
increase it (compared with 70 percent of respondents who said so in 2011).
Meanwhile, the share of time spent on execution, investments, and M&A has
shrunk, which is likely related to the fact that overall M&A activity has
declined since 2007.

Room for Improvement

While
respondents say their boards are taking more responsibility for strategy, risk
management is still a weak spot—perhaps because boards (and companies) are
increasingly complacent about risks, as we move further out from the 2008
financial crisis. This is the one issue where the share of directors reporting
sufficient knowledge has not increased: 29 percent now say their boards have
limited or no understanding of the risks their companies face. What’s more,
they say their boards spend just 12 percent of their time on risk management,
an even smaller share of time than two years ago.

Despite the
progress they report, directors identify the same factors that would most
likely improve board performance as respondents did in the previous survey: a
better mix of skills or backgrounds, more time spent on company matters, and
better people dynamics to enable constructive discussions. With respect to
time, directors say they devote roughly the same number of days to board work
as in 2011, and they still want more time. Across regions, directors at North
American companies work an average of 22 days on company matters—notably less
time than the 29 days and 34 days, respectively, reported by directors at
European and Asian companies.

Looking ahead

Increase
attention to risks.
According to respondents, most boards need to devote more attention to
risk than they currently do. One way to get started is by embedding
structured risk discussions into management processes throughout the
organization.

Make
time. As in 2011, most
directors say they want to spend more time on board work, and the results
suggest real benefits from doing so: directors at higher-impact boards
spend many more days per year on their work than everyone else, which
likely helps them stay more relevant to and engaged with important company
matters.

Learn
from peers.
Directors at boards with less impact have much to learn from the actions
taken by higher-impact boards, and not only when it comes to strategy.
Using robust financial metrics, conducting postmortems of major projects,
and using systematic processes to create competitive advantage through
M&A—which the high-impact boards do more often—could all help boards
become better.

How would you compare your non-profit
governing board to these results? Do you
periodically survey your board for bench-marking and opportunities for
governance improvement? For a full copy
of the survey findings, go to http://www.mckinsey.com/Insights/Strategy/Improving_board_governance_McKinsey_Global_Survey_results?cid=other-eml-alt-mip-mck-oth-1308

Monday, August 26, 2013

Despite the slow economy, some non-profit
organizations are doing well.Their
membership and major programs, products and services continue to be
successful.Their financial performance
continues with annual positive variances to their yearly budgets.

Many other non-profit organizations, however,
have not been so fortunate.Since the
beginning of the economic downturn in 2009, the membership and major programs,
products and services of these organizations have not performed as well as
hoped.Many of these organizations have
experienced substantial reductions in membership, dues revenues and non-dues
revenues.The threat (or actuality)
of negative financial performance has alarmed volunteer and staff leadership
alike.What can be done?

This situation is really about aligning mission
and money.When the economy and
organizational performance are going well, there may often be little concern
for the alignment of mission and money.When things are going so well, however, the alignment of mission and
money becomes much more critical for the prolonged health of the organization.What should volunteer and staff leaders be
doing to align mission and money?

One key approach to align mission and money is
evaluation.Annual evaluation of
association programs, products and services serves to analyze and make
decisions about existing and proposed programs, products and services to determine
the degree to which each of these supports the organization’s mission and
operational goals, including financial performance.An on-going annual valuation process, tied
into the organization’s annual budget process, providing a rational
decision-making basis for existing and new programs—which programs deserve
continuation, expansion, reduction or sun-setting.This same review process also helps to
identify and prioritize which of the new program proposals deserves resources
for the coming year.

If your organization is facing challenging
economic conditions this may be the ideal time to dust off and refresh your
annual review of programs, products and services.Are your mission and money aligned as needed
to support your organization’s successful performance?

About Me

For health, education, workforce, finance and other non profit and public service organizations that want to leverage resources and strategically plan for U.S. or international market expansion.
Plexus Consulting Group® provides a broad-range of consulting and management services to not-for-profit and public service sectors. We help clients overcome challenge, achieve excellence, and maintain success.
The Plexus team of multilingual, multitalented professionals align themselves primarily among lines of industry specialization, including Globalization, Education, Workforce Development, Healthcare, and Financial Services.